Spending Public Money the Smart Way : Santa Ana Needs to Look at Range of Issues in Its Fledgling ‘Buy American’ Effort

Last week, the Santa Ana City Council put off a decision to buy two Japanese dump trucks, even though Toyota of Garden Grove came in with the low bid. At the request of Councilman Daniel E. Griset, the Finance Department is charged with looking at what other cities are doing to “buy American.” One example is Los Angeles, which last week debated and passed a ballot proposal to amend the City Charter in the “Buy American” spirit.

But however emotionally satiating, such steps--which would require preference for U.S. firms competing for city contracts--are a mistake. In proper measure, encouragement to “buy American” is to be cherished. It calls attention to the large imbalance of trade with countries like Japan, and spotlights the need to nurture and develop American industries--and the need to support U.S. workers.

Buying American is one thing; buying dumb is something else. When it is blown out of proportion, the “buy American” movement is dangerous. It could induce a city to pay excessively for inferior goods and services. It is the municipal equivalent of national trade protectionism. It runs counter to the spirit and intention of existing and under-negotiation trade accords with other nations.

Inquiries like Santa Ana’s are an attempt to get a public-policy handle on the “buy American” spirit, and that is just too hard to do. The effort creates more problems than it solves. For example, many Toyota trucks are actually made in Fremont by American workers, and the company employs 16,000 Californians.

Decision-makers need to look at a whole range of issues before deciding how to spend the public’s money, not just at the domestic content of a product or service. Should cities tilt toward U.S. firms--or, even better, local firms--whenever possible? Absolutely. But should they so tilt if, for example, the product is unproven, non-competitive or just plain lousy?

We all need to keep in mind that over the years the American economy has benefited mightily from foreign sales of its products. Exports are now one of the few booming areas of the U.S. economy. That must be kept in perspective by local legislators who--however well-meaning, and in some cases, however thoroughly grandstanding--seek to respond to public anxieties by offering unworkable and counterproductive cures.

Americans must work to tear down barriers to their exports, whether in Japan or elsewhere. They should not in the process erect barriers of their own that in the long run would be self-defeating.